$30 Billion Government “Prevent Foreclosure” Program Scrapped

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Once again, party politics, instead of citizen needs, seem to be at the heart of our “dear, concerned for the American homeowner” elected officials again. Today, the house voted — right down party (Republican) lines — to end the HAMP program. According to an article in The New York Times entitled, House Votes to Scrap Foreclosure Program:

Republicans, ignoring a veto threat from the White House, pushed a bill through the House on Tuesday that would eliminate a foreclosure prevention program that provides financial incentives to mortgage servicers who modify loans for homeowners who are behind on their payments.

So, what does the mean for the Average Joe, the average American homeowner?

Basically nothing right now. Because, as we discussed in the post, ATTN: Unemployed Homeowners Facing Foreclosure — Program to Help You Keep Your Home on the Chopping Block:

While the bills passed the Republican-led House of Representatives, they still have to pass the Democratic-controlled Senate. Gotta love the good ole American system of checks and balances (aka “cronyism”) at work here.

It’s unlikely that the programs will be ended because President Obama has said that he would veto any efforts to do so. To overrride a presidential veto requires a two-thirds majorty of both the House and Senate.

Preventing Foreclosure: The Most Frustrating Part of the Process for Struggling Homeowners

NOBODY in Washington seems to give a crap about actually helping homeowners keep their homes. They’re too busy squabbling to find  a real solution.

And, with lenders dragging their feet on things like home loan modifications, resisting cutting principal balances and refusing to even speak with some homeowners until the “catch up arrears,” it fees like no one cares — at least about homeowners.

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Our elected officials are too busy worrying about the next election and pandering to the idiots in both of their parties to care about doing the right thing. As we proposed in this solution to the home foreclosure crisis, which takes guts :

. . . these are COMMON SENSE solutions to the home foreclosue crisis . . . not something most lenders [or apparently our elected officials in Washington] want to hear when it comes to helping homeowners prevent foreclosure.

But then again, we (the American public) put these dodo’s in office.

Related Posts

Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)

 

Home Foreclosure News: “Qualified to Buy” Families Left Virtually Homeless Because Banks Won’t Go Through with Sales

 

Stop Foreclosure: The Secret Your Lender Won’t Tell You That Can Help Save Your Home

 

Foreclosure Crisis to Drag on for Another 9 Years? 

 

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

 

Home Loan Modifications: 30% of Those Made in 2009 Were Seriously Delinquent or in Foreclosure Process — Lessons Learned?

 

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

 

Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home

 

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Celebrity Foreclosures in 2011: From Sports Greats to Entertainment Superstars, Home Foreclosures are Not Limited to the Average Joe

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

13 Celebrity Foreclosures: Roundup of the Rich and Famous Losing Homes to Foreclosure in 2011

If you’re an average homeowner in America trying to stop foreclosure, you’re not alone. The rich and famous are suffering too. Some of the celebrities facing foreclosure this year:

Mel Gibson: Acadamy-award winning actor, director;

Tony Braxton: R&B superstar songstress;

Dr. J (aka Julius Erving): NBA Great; and

Sergei Federov: Hockey great and former Anna Kournikova husband/flame;

among others.

Asking Price $100+ Million; Sold for $15+ Million

Who owned the home that sold for a “paltry $15.3 million” when the original price was an astounding $100+ million?

Learn more in the celebrity foreclosures slide show.

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Related Posts

Celebrity Home Foreclosure News: West Wing & Thirtysomething Star Timothy Busfield May Lose Home in January

Tiger Woods’ $865,079.36 Monthly Mortgage Payment

Octomom Avoids Foreclosure

Stopping Foreclosure: “Extreme Home Makeover” Family Held Raffle to Avoid Foreclosure?

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Home Loan, Bad Credit and How to Qualify: Yes, It’s Still Possible, But . . .

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Highly respected Certified Foreclosure Specialist, Tara-Nicholle Nelson, a writer for the industry-leading real estate website Trulia.com, wrote an interesting article entitled, 5 Mortgage and Foreclosure Myths, On March 9th for the site.

Can You Qualify for a Home Loan with Bad Credit?

Even though Ms. Nelson is an expert, I respectfully disagree with a couple of her points, ie: (i) Buyers with bad credit can qualify for home loans; and (ii) if you don’t have equity, you can refinance.

Today, we’re going to take a look at why I disagree with her point that buyers with bad credit can qualify for home loans. In a not-too-distant future post, we’ll discuss why I believe it remains difficult to refinance if you don’t have any equity in your home.

Note: I was a mortgage consultant (2005-2006) right before the foreclosure crisis hit. Hence, I saw first-hand a lot of what went on (and what went wrong) that got the housing market in this mess.

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Home Loans with Bad Credit: Why Many Buyers Can’t Qualify Even Though In Theory It’s Possible

Ms. Nelson writes about qualifying for FHA loans with bad credit:

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.

While in theory potential homebuyers can qualify for mortgages with scores this low, the actuality of the matter is, it’s going to be darn hard to do so. The reason is, usually, when someone has FICO scores this low, it signifies they have problems handling money.

One of the things that dings a credit score the most is late payments – usually on unnecessary unsecured debt like credit cards. This says to potential lenders that you are a credit risk and they are unlikely to offer you a home loan with this kind of patterned behavior on your credit report.

Another thing is, most lenders want a down payment now, as Ms. Nelson notes. Zero down home loans are basically a thing of the past for the foreseeable future (I personally don’t see them ever coming back to the degree they were before this most recent home foreclosure crisis hit).

But the reality is, many who have credit problems (ie, those with credit scores like 580), don’t have 5% to 10% down payments. According to the June 3, 2009 article on Forbes.com entitled, Down Payment on Home Out of Reach for Half of U.S., Poll Finds, the average home price in America is just under $200,000.

What does this mean for a down payment? As the article states:

With the average home price in America just below $200,000, a 20 percent down-payment is near $40,000, a nice chunk of change by any standard. . . . The NFCC [National Foundation for Credit Counseling] recently asked consumers about their ability to meet the down-payment requirements . . . Of the more than 2,000 respondents, almost half (49 percent) admitted that they’d never be able to save enough money for a down-payment on a home.

Even a low down payment of 3.5% is $7,000. And don’t forget, this is just the down payment. This doesn’t take into account closing costs.

Getting a Home Loan with Bad Credit: Don’t Forget About Closing Costs

Just how much are closing costs?

Well, they run 2 to 4 percent of the purchase price. So on even on the low end at 2%, on a $200,000 home, that’s another $4,000.

So now we’re looking at at least $11,000 and that doesn’t include the incidentals – moving costs, getting furniture and home peripherals, eg, window coverings (which can be expensive as heck). This can run another few thousand dollars easily.

See why I think it’s unlikely that if you have bad credit (eg, a 580 FICO score), you’re unlikely to qualify for a home loan?

That being said, I do think there are those with bad credit who can qualify. Who are they? Well, let’s take a look.

Who Can Get a Home Loan with Bad Credit: The Ideal Candidate

Potential buyers with bad credit – that has not been a part of their overall history – are still good candidates for mortgage loans. The reason is, lenders are taking the recent foreclosure crisis – and the economic factors that contributed to it – into consideration.

So for example, if you had perfect credit for years and years, then lost your job, ran through your savings and fell behind on credit card payments and other bills, then it’s easy to see why “all of a sudden” your credit is bad.

But, if you’re recovering – eg, you found a new job, have caught up your bills and have started saving again – a lender will take these factors into consideration when you go to apply for a mortgage loan.

Note: Learn how to repair your credit quickly and get on the road to home ownership.

A Key Difference Between Potential Homeowners Trying to Get a Home Loan with Bad Credit

But the key difference between this type of potential buyer and the average person with bad credit is that bad credit wasn’t a normal part of their financial history. Circumstances – which everyone these days understand – caused it, and this type of person is reverting to their natural ways (eg, paying bills on time, saving, etc.) now that they are back on their feet, so to speak.

See the difference?

So yes, while in theory it remains possible to get a mortgage loan with bad credit, you have to be a pretty perfect candidate. And if you’re not, the only way to become one is time – start saving, start paying off credit card and other unsecured debt, start living with your means, etc.

All of this signals to a potential lender that even though you’ve may have been irresponsible in the past with your finances, you’ve learned your lesson and are now on the right track.

And, that’s when you’ll qualify for a home loan – even with bad credit.

Related Posts

Home Foreclosure: The New Credit Standards to Qualify for a Mortgage Brought on by the Crisis

Home Foreclosure News: Owning a Home Becoming a Lot Harder for Lots of Americans Because of the Foreclosure Crisis

Foreclosure & Credit: How Does Foreclosure Impact Your Credit Report?

Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)

First-Time Home Buying Advice: Is It Better to Buy a New Home than a Foreclosed Home?

Foreclosure Advice & Credit Card Debt: Can Credit Card Companies Put a Lien On Your Home?

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

How to Lose Your Foreclosed Home at Auction and Still Receive Thousands of Dollars

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

While this may sound too good to be true, it is possible to have your foreclosed home sold at auction and receive a check. How? It’s a little-known concept many foreclosed-on property owners don’t know about called “overbid funds.”

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What are Overbid Funds?

As discussed in the Time magazine article entitled, How to Lose Your Home in Foreclosure, Then Receive a Check, overbid funds are explained this way:

[These are monies that come] from auction bids that exceeded the amount owed on the house at the time of the foreclosure. Counties are required by law to pay the homeowners after all eligible liens have been paid.

Other Reasons Overbid Funds May Be Available

According to the site, WeProbateFlorida.com, another reason overbid funds are generated is because a homeowner may, for example, fail to pay property taxes.

This could be because the person is elderly and passed away without any heirs or any family member that knows about the property. This then leads to the home being auctioned off and the winning bid often exceeds the actual amount of the taxes that are owed on the property (aka tax deed investing).

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Why Most Homeowners Don’t Know about Overbid Funds They May be Entitled To

The following info can make you feel furious or stupid.

The main reason most homeowners who are entitled to overbid funds (in many cases, thousands of dollars) is because while counties are legally obligated to pay homeowners these monies after all eligible liens against a foreclosed property have been satisfied, they are NOT required to conduct a diligent search for the homeowner.

The kicker is, the address on file for most of the homeowners entitled to overbid funds is the foreclosed property that was sold at auction.

In other cases, eg, a property that was sold because a homeowner died and the property taxes went unpaid, no existing relatives step forward.

What Happens to Unclaimed Overbid Funds?

If no one claims these monies within five years of the date of the foreclosure sale, the county gets to keep the funds.

Lost Your Home to Foreclosure? How to Get Overbid Funds You May Be Entitled To

The first thing is to make sure you have a forwarding address on file. I’d also stay in close contact with the county authorities that handled your foreclosed property sale to make sure that if there are overbid funds available after all liens are paid that they pay you.

Foreclosed Homeowners Receive More Than $33,000 in Overbid Funds

Read the story of one Colorado family who received more than $33,000 in overbid funds, as well as many others who’ve received thousands as well – and most of them had no idea they were entitled to these monies.

Related Posts

Right of Redemption Laws: How to Get Your Home Back – Even After It’s Sold as a Foreclosure
Home Foreclosure Auctions: The Biggest Advantage and Disadvantage of Them

Foreclosure Auctions: Turf War Ensues Between Local Municipalities and Private Foreclosure Auction Firms (Opportunity Knocks for Foreclosure Business Owners)

Florida Foreclosures: Good News for Homeowners — Court Requires Mediation before Foreclosure

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

ATTN: Unemployed Homeowners Facing Foreclosure — Program to Help You Keep Your Home on the Chopping Block

Just as it seems some good news was coming down the pike for homeowners trying to stop foreclosure, legislators in Washington seem to be taking a step back.

What do we mean?

Republican-Led House Voting to End Many Government-Sponsored “Stop Foreclosure” Programs

According to the article, House votes to cancel second foreclosure-relief program, on Philly.com: The House voted Friday [March 12th, 2011] . . . to cancel $1 billion approved last year for a program designed to provide zero-interest loans for unemployed homeowners facing foreclosure.

President to Use Veto Powers to Save HAMP & Other “Prevent Foreclosure” Programs

While the bills passed the Republican-led House of Representatives, they still have to pass the Democratic-controlled Senate. Gotta love the good ole American system of checks and balances (aka “cronyism”) at work here.

It’s unlikely that the programs will be ended because President Obama has said that he would veto any efforts to do so. To overrride a presidential veto requires a two-thirds majorty of both the House and Senate.

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Stopping Foreclosure: Why Government Prevent Foreclosure Programs Like HAMP are Unlikely to Be Ended

With a Republican-controlled House and a Democratic-controlled Senate, how likely is this to happen?

Learn more about what it takes to override a presidential veto.

Related Posts

Prevent Foreclosure Advice: Obama to Stop Banks from Foreclosing on Homeowners?

 

Home Loan Modifications: Why Federal Government’s Mortgage Modification Program a Mix of Good and Bad News for Homeowners

 

Home Loan Modification: 65-75% of Loans Modified via HAMP (the govt’s Home Affordable Modification Program) Likely to Go Bad

 

Home Loan Modifications via Government’s “Prevent Foreclosure” Program Go Up, But Will It Help Stem the Tide of Foreclosures?

 

Home Foreclosures Projected to Rise as Government’s “Prevent Foreclosure” Program Falters

 

Stopping Foreclosure: Obama Administration to Launch 2 New Programs to Help Homeowners Avoid Foreclosure (One is for Unemployed Homeowners)

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Stopping Foreclosure: Banks Considering Giving Principal Reductions, Permanent Modifications & More to Prevent Foreclosure for Many Homeowners

As we discussed in last Thursday’s post here, Stopping Foreclosure: Obama Administration Considering Forcing Banks to Modify Home Loans – What It Means for The Average Homeowner, the federal government FINALLY seems to be not only going to bat for the average homeowner who’s trying to prevent foreclosure, now they seem to be putting some muscle behind that bat.

What do I mean?

In yesterday’s article on Businessweek.com entitled Attorneys General Push for Loan Reductions, Seek Bank Accord, some common sense regulation seems to be coming down the pike.

Note: The reason I keep repeating the word “seem/seems” is that until it’s actually written into law, it doesn’t mean a hill of beans.

But things do “seem” to be moving in the right direction. Following is what legislators are looking at forcing/advising banks to do now to help homeowners avoid foreclosure.

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Stopping Foreclosure: U.S. Attorney General Pushing for the Following that Could Significantly Increase the Chance that Many Homeowners Will Prevent Foreclosure

Home Loan Help: Banks Told to Give Principal Reductions

This will definitely help homeowners who are underwater.

What is a Principal Reduction?

In case you don’t know, it’s when a lender agrees to “forgive” part of the outstanding balance on your loan. That’s right — you don’t have to pay it back. For example, if you owe $150,000 and your home is only worth $120,000, your lender may give you principal loan reduction of say $20,000, meaning you only have to pay back $130,000.

While this is still above what the home is appraised for, what it does is reduce your monthly payments because then any mortgage modification you receive will only be based on the new balance owed of $130,000, NOT the original $150,000.

One homeowner I know of received just this kind of principal reduction from Bank of America, her mortgage holder.

According to the Businessweek.com article mentioned above, it really boils down to the following:

It’s a question of will enlightened self-interest prevail . . . The compromise to modify loans in the right situation is economically very much in the interests of investors and owners. . . . investors agreed to principal reductions during the 1980s farm crisis, knowing that a partial payment from distressed landowners often would yield more than a foreclosure.

Home Loan Help: Banks Not to Foreclosure While Modification Process is in Effect

Many homeowners during this foreclosure crisis have said that they thought they were well on their way to modifying their home loan, only to find out that they were being foreclosed on. The proposed legislation would put a halt to this practice, meaning that a bank could not foreclosed on a homeowner as long as they were in the modification process.

Furthermore, the legislation seeks to ensure that if you are finally and formally denied a mortgage modification, you have to be notified in writing.

Damn common sense, don’cha think?!

I can’t help but think if this kind of common sense had been used when this whole foreclosure crisis started, we might be much further along the road of getting out of it by now.

What do you think?

Home Loan Help: Lenders to Assign One Rep, Not Have Homeowners Talking to Every Single Employee

Another problem many homeowners trying to stop foreclosure complain about incessantly is that every time they call, the speak with a different person and have to go through their whole story over and over and over again.

Oftentimes, they have to resubmit paperwork – again, over and over and over again. It get lost, misfiled and/or assigned to another rep, and the process repeats itself.

Can you imagine what this does to a worried, stressed-out homeowner who’s trying to save the roof over her head for her and her entire family?

The following is from a distressed homeowner trying to prevent foreclosure in the forums over at LoanSafe.org. It kind of sums up the experiences (and frustrations) of most homeowners in this situation:

July 14: 2010: I just went through the same thing, they declined the modification due to the lack of documentation. I told the rep exactly what documentation the previous rep (which I gave the name and ID number of the rep) told me to send in. It did not matter. Now they are reviewing me for the . . . Modification. So let see. I have been going through this since November 2009. I am ready to just give up, it’s actually taking a toll on my life.

The proposed legislation will hopefully put a halt to these kinds of situations this by requiring mortgage holders and servicers to give homeowners a single point of contact. This would prevent a lot of this back and forth and lost loan modification paperwork.

Heck, even prisoners get this (in the form of a parole officer) when they’re released. It’s about time law-abiding homeowners received the same treatment because what most have received so far will make them want to commit a crime, ya think!?

Home Loan Help Most Homeowners Desperate Want: Permanent Home Loan Modifications

This is perhaps what most homeowners trying to prevent foreclosure have been clamoring for more than anything else. Many don’t mind paying more for their homes than the market says they’re worth. After all, most want to do the right thing.

But, when you don’t know if you’re going to be able to afford your home in six months or a year after your current home loan modification works out, it kinda makes you go, “What’s the point?” And, this is exactly why many have done the jingle mail walk (ie, walked away from their homes).

While the proposed legislation can’t “make” banks give permanent home loan modifications, it can “make” them see the prudence in doing so by NOT giving fines for other alleged/perceived offences in this whole process.

Good ole blackmail . . . it’s how things get done in Washington.

Can we send up a collective hallelujah that it works this time because homeowners trying to prevent foreclosure are at their wit’s end – and many of them are choosing to just walk away. And, a lot of good THAT does for this housing crisis.

Related Posts

Stopping Foreclosure: What to Do When the Bank Refuses to Accept Your Mortgage Payments & Tries to Escalate the Home Foreclosure Process

Right of Redemption Laws: How to Get Your Home Back – Even After It’s Sold as a Foreclosure

Underwater On Your Home? Filing Chapter 7 Bankruptcy? Should You Reaffirm Your Mortgage?

“Cash for Keys” Can Help if You Have a House in Foreclosure & Can’t Afford to Move

How the Foreclosure Crisis Started: Investors, Speculators, Mortgage Fraud & Lax Lending Standards All to Blame

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

First-Time Home Buying Advice: Is It Better to Buy a New Home than a Foreclosed Home?

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to the article, Homebuilder ads highlight pitfalls of foreclosures, on Businessweek.com today, the latest ads from homebuilders are highlighting the advantages of buying newly constructed homes rather than foreclosed properties. But, is this really in your best interest if you’re looking to buy.

First-Time Home Buyer: Is it In Your Best Interest to Buy a Newly Constructed Home as Opposed to a Foreclosed Property?

As with most things in life, it’s not that simple. And, as a home is often the largest purchase most of us ever make, it takes some careful consideration.

One of the best ways to figure out if buying a new home or a foreclosed home is best for you and your family is to do a simple pros and cons list. There’s nothing like seeing it in black and white to make it real.

To that end, following are some pros and some cons of buying new homes vs foreclosed properties.

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First-Time Home Buying Tips: Pros of Buying a New Home vs a Foreclosed Home

Pro: You’re the first one to live there (this is a sentimental/emotional factor you can’t afford to ignore).

Pro: You have more input and can put your “personal style stamp” on the property while it’s being constructed. New home-buying tip: Don’t be afraid to ask for what you want. If you prefer a different type of sod than the one being used, ask for it. On inexpensive things like landscaping, you’d be surprised at what some builders will agree to.

Pro: You choose whether or not to buy from that particular builder. Hence, you can do your due diligence on their reputation in the industry.

Pro: You can make sure that the home is up to par by having it inspected during various stages of the construction process. This means you won’t have to worry about the use of banned/hazardous materials (eg, lead paint), and shoddy workmanship (if you keep a close eye).

Pro: Home maintenance issues will ostensibly be years away (eg, roof replacement, HVAC servicing, floor and cabinet refurbishing, etc.). And if there are major issues, they are usually covered by some type of home warranty.

Pro: Get out your “I want” home buying checklist! You can often negotiate with the builder for extras, eg, include the major appliances, higher-quality countertops, more decorative light fixtures, etc.

Pro: Newer homes are often more energy efficient than older (possibly foreclosed) ones. Energy-efficient legislation like the Clean Energy Act of 2007 has come down the pike in the last decade or so that dictate this to a certain degree.

First-Time Home Buying Tips: Cons of Buying a New Home vs a Foreclosed Home

Con: New homes tend to cost more than foreclosed homes.

Con: Often, what you see is not what you get. Model homes often have the upgrades that make you fall in love with it. These often aren’t included and cost extra if you want them.

Con: For the most part, there’s little to no negotiating on the price of a newly constructed home because they have to keep the appraised value on all the homes in a neighborhood. So, for example, if they cut your purchase price by $20,000, they’d in essence be lowering the price for all the homes in the neighborhood.

Con: Paying for neighborhood amenities – In many new home subdivisions, there are amenities like pools, tennis courts, club houses, etc. And, you pay for them. If you purchased a foreclosed property that’s not part of a subdivision, you don’t have to worry about this.

Con: In light of the foreclosure crisis, it’s harder to qualify for home loans now. You have to have almost perfect credit (ie, a 750 or better FICO score) and put down a larger down payment (5-20% or more). And forget zero-down home loans; they practically don’t exist anymore.

It’s a lot easier to come up with $10,000 as a 10% down payment on a $100,000 foreclosed property than to come up with $20,000 as as a 10% down payment on a $200,000 newly constructed home, no?

Note: Got Bad Credit? Learn how to repair your credit so you can be “mortgage ready” — whether you’re buying new construction or a foreclosed property.

Conclusion: Pros and Cons of Buying a New Home vs. a Foreclosure Property

Of course, there are many more factors to be considered when buying a home, eg, school system, property taxes, commuting distance, etc.

The bottom line is, no one can decide what is right for your family but you when it comes to whether to buy a foreclosed property or a new home. But, these are just some factors to be aware of as you think through the process.

Related Posts

Because of Home Foreclosures, Buying a Home Is Cheaper than Renting in Almost 75% of Largest American Cities

Want a Mortgage? Why It’s Tougher to Qualify Now & Why That’s a Good Thing

Home Foreclosure News: Owning a Home Becoming a Lot Harder for Lots of Americans Because of the Foreclosure Crisis

How the Foreclosure Crisis Started: Investors, Speculators, Mortgage Fraud & Lax Lending Standards All to Blame

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Home Loan Help: Documents Needed to Apply for a Mortgage Modification with HSBC (and Other Lenders)

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

HSBC, Europe’s largest bank, made headline news recently when it halted foreclosure proceedings for U.S. homeowners. As discussed in the recent post here, Stopping Foreclosure: Another Big Bank (HSBC) Suspends Foreclosures Because of Investigation into Robosigning, this presents an ideal opportunity for homeowners to get some home loan help to prevent foreclosure if they have a mortgage with HSBC.

home-loan-application-help-for-mortgage-modification

Home Loan Help: Gather the Following Documents Before You Contact Your Lender for a Mortgage Modification

And, one of the best options for doing this is to apply for a mortgage modification. Following are the documents you’re going to need to gather – whether you’re seeking a modification from HSBC or another lender.

Proof of Income: Gather any documents that show what you earn, ie, pay stubs, child support payments, alimony payments, monthly income from investments, rental/real estate income, disability income, social security, etc.

Note: You don’t have to show all forms of income; but if you’re trying to hang onto your home, it’s likely that the more income you can prove, the better chance you have a getting a modification.

Bank Statements: Most lenders will ask for the most recent 30-60 day statements. I say be really proactive and show them the last 3-6 months, especially if it helps you show consistent income that will support the home loan modification you’re seeking.

Make sure you copy all pages of your bank statement (front and back) as they’re usually numbered. Even if a page has no relevant info on it (eg, just bank legal mumbo jumbo), still copy it because it may look like you’re trying to hide something if a numbered page is missing.

List of Bills: You can just list your monthly obligations. I’d list exact amounts. For example, if your monthly car payment is $278.39, don’t round it up to $279. Why? Because if you pay your bills online and it comes right out of your checking account (as a lot of people do), this amount will match up with the bank statements you’re sending in.

This is a small thing, but every little bit of conciseness helps. Remember, these are just people making decisions. So when you’re 100% truthful – even down to exacting pennies – it sends a subliminal message that, “Hey, this homeowner’s giving it to us straight.”

List everything – don’t forget small, miscellaneous and/or quarterly bills like garbage, HOA fees, gas for your car, etc.

FYI, these are expenses you can approximate because you’ll want to break them down into what it costs per month. For example, if you pay your trash bill quarterly and it’s $54, that would go on your monthly list of bills as $18.

Home Loan Application for Modification: A Note about Secured Credit versus Unsecured Credit

While you should list all bills, many mortgage companies give less weight to unsecured credit obligations you may have, eg, credit cards, when considering whether or not to give you a modification and how much it should be. After all, who wouldn’t stop paying credit cards to save their home?

In your application for home loan help, you should still list these obligations, but just know this going in.

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Home Loan Help: What to Put in Your Hardship Letter
 
Besides the above, you should include a hardship letter that explains why you need a mortgage modification. Speak from the heart here; it doesn’t have to (in fact should probably not be) “official.”

Did you lose your job, suffer an illness, have to care for a sick spouse or other loved one? Were you downsized but expect to be called back in three months? Did you change careers and take a drastic pay cut?

In short, explain what happened and why you need home loan help and/or no longer able to make your regular mortgage payments.

Home Loan Help: Other Info to Include in Your Hardship Letter

Payments you are comfortable with: Eg, “I’m seeking a home loan modification more in line with my existing income. As the financial documents submitted prove, my monthly income is now $2,000. I can comfortably afford $600, so am seeking a modification from my current payment of $1,071 to something in this range.”

Does this mean you’re going to get it? No. But it lets the lender know that you’ve taken a long, hard look at your finances and that you know where you stand financially.

Your contact info: Be sure to include all the ways that you can be reached.

Your loan number: This should be included on every page of every document you send in.

Home Loan Application for Mortgage Modification: Getting Your Package Together to be Sent Off

After you’ve done all of this, sign and date everything and make multiple copies. Why? Because one of the problems many seeking modifications have is that banks lose their material and they have to submit them over and over and over again.

So, make several copies of everything. If you fax materials over, one copy may be sufficient. But I still recommend at least two, just in case you want to send hard copies at some point.

Good look getting the home loan modification help you need to prevent foreclosure!

Related Posts

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

Home Loan Modifications: 30% of Those Made in 2009 Were Seriously Delinquent or in Foreclosure Process — Lessons Learned?

Home Loan Modification: 65-75% of Loans Modified via HAMP (the Govt’s Home Affordable Modification Program) Likely to Go Bad

Home Loan Modifications via Government’s “Prevent Foreclosure” Program Go Up, But Will It Help Stem the Tide of Foreclosures?

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Stopping Foreclosure: Obama Administration Considering Forcing Banks to Modify Home Loans – What It Means for The Average Homeowner

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

According to the Washington Post article, In foreclosure settlement, U.S. may force banks to meet loan-modification quotas, the Obama administration is considering a number of options that would, in essence, force banks to not only offer home loan modifications, but also reduce principal balances for homeowners who are underwater.

 

So, what exactly does this mean for the Average Joe who owns a home?

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Keep Hope Alive: The Government Is Going to Bat for You (Maybe)

 

If you’ve been at your wit’s end trying to get a home loan modification, or get your principal reduced or even just trying to refinance, all is not lost. While the government’s prevent foreclosure program, HAMP, has not lived up to its original promise to help 3-4 million homeowners via one of these methods, it’s still a possibility.

 

The Obama administration now seems to be getting serious. And, an argument could be made that they’re even looking for creative ways to get what they want.

 

What do I mean?

 

Participation in Government’s Prevent Foreclosure Program, HAMP, No Longer Voluntary for Banks?

 

Well, participation in HAMP is voluntary. Now, the government is looking for ways to penalize company that REQUIRE them to if not participate directly in HAMP, at least do some of the things the program wants, ie, reduce principal balances, permanently modify more home loans, etc.

 

And, isn’t this what homeowners trying to prevent foreclosure have wanted all along? They just want mortgage lenders and servicers to play fair and give them a decent chance to save their home. And, even if you’re sitting there shaking your head going:

 

But why should the government force mortgage holders to help distressed homeowners? They signed the mortgage papers and if they can’t afford their home because they bought more house than they could afford or took out one of those “exotic mortgages and it’s now catching up with them, then too bad.

 

Why the Foreclosure Crisis Should Matter to All Homeowners, Not Just Those Facing Foreclosure

 

Well, let’s not forget that while some or all of the above may be true, when a homeowner is foreclosed on, it affects everyone in the vicinity’s property value. So, it behooves banks to work with homeowners to keep as many of them in the property who want to stay as possible – for the sake of their bottom line, as well as surrounding homeowners.

 

The foreclosure crisis really brings home the saying, “We’re all in this together,” no?

 

Related Posts

 

Home Foreclosure Crisis Deepens: 11 Million Homeowners at Risk of Losing Their Homes

 

Home Loan Modifications: 30% of Those Made in 2009 Were Seriously Delinquent or in Foreclosure Process — Lessons Learned?

 

Foreclosure Crisis to Drag on for Another 9 Years? 

 

Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012

 

Home Loan Modifications: 30% of Those Made in 2009 Were Seriously Delinquent or in Foreclosure Process — Lessons Learned?

 

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

 

Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home

Stop Foreclosure: The Secret Your Lender Won’t Tell You That Can Help Save Your Home

P.S.: Business Opportunity: Learn How to Start a Foreclosure Cleanup Business. Read how one foreclosure cleaning biz owner makes up to $40,000/wk.

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Stopping Foreclosure: Another Big Bank (HSBC) Suspends Foreclosures Because of Investigation into Robosigning

ForeclosureBusinessNews.com: “Foreclosure News the Average Joe Can Use!”

Back in October, many large banks in the U.S. halted foreclosures because of investigations by the feds into improper procedures known as robosigning. Now, another large bank – a European one that holds a lot of U.S. mortgages – has stopped foreclosure proceedings because of the same thing.

The bank is HSBC, which is Europe’s largest bank (Learn more in HSBC Halts U.S. Mortgage Foreclosures After Joint Examination by Fed, OCC).hsbc-bank-halts-foreclosures-in-us

Why HSBC Bank Is Halting U.S. Foreclosures

According to the article, HSBC Suspends Foreclosure Filings in U.S., the reason the giant London-based bank is stopping foreclosures for now is:

. . . it . . . received a supervisory letter from the Officer of the Comptroller of the Currency that cited problems in its processing, preparation, and signing of affidavits and other documents supporting foreclosures. The bank received a similar letter from the Federal Reserve.

Just like with U.S. banks though, the same outcome is expected, ie, once the feds have completed their investigations, foreclosure proceedings against homeowners are expected to continue.

How HSBC Operates When It Comes to Home Loan Modifications Compared to Some Large U.S. Banks

HSBC is known as one of the toughest banks around when it comes to renegotiating your home loan, ie, getting a home loan modification. Unlike some giant U.S. banks (eg, Bank of America) that have bent over backwards to work with homeowners who want to stop foreclosure, HSBC has a reputation for not doing so.

Bank of America Gives Permanent Home Loan Modifications; HSBC Doesn’t

For example, one Bank of America homeowner I know of got her mortgage reduced by almost 50%, going from paying almost $1,600 a month to paying just over $800 — and this includes property taxes and insurance).

Furthermore, this is a permanent home loan modification, not some temporary mod that can go back up over time.

Bank of America Gives Principal Reductions; HSBC Doesn’t

AND, this homeowner also received a principal reduction. What this means is that Bank of America (her mortgage holder), took $16,000 off what she has to pay them back. This is very uncommon of – even in this foreclosure-ridden market.

Compare this with HSBC . . . they don’t do principal reductions, they don’t give permanent home loan modifications and if you fall behind on your mortgage by more than 3-4 months, you’re most likely going to be foreclosed on by them.

While this is just a sampling of HSBC mortgage practices, it seems to be a good indication of how HSBC operates when it comes to home loan modifications.

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How to Use This Time to Your Advantage If You Have a Home Loan with HSBC

If you have a home loan with HSBC, try to use this time to save some money so that you can bring your mortgage current if you want to stop foreclosure. The one thing that most of the forums and internet chatter in general seem to agree on when it comes to HSBC is that they want you to bring payments current before they’ll give you a modification – even a temporary one.

Insight into How to Bring Your Home Loan Current with HSBC in Order to Avoid Foreclosure and Qualify for a Home Loan Modification

Of course, this is the sticking point for most homeowners – when they fall behind, they don’t have the funds necessary to bring their mortgage totally current. If this sounds like you, ask them if you can take the overdue payments onto the back end of your home loan, and/or bring it current over time by paying a little extra each month for a time.

Also, continue to press them on a permanent home loan modification (even though this seems to be an exercise in futility).

It’s going to be a long, drawn-out process, so just buckle down and give them everything they ask for (eg, bank statements, proof of income (pay stubs), tax returns, etc.), if you’re seeking a home loan modification.

But, be sure the home loan modification you’re seeking with HSBC (or any other bank) is something you can afford going forward because if not, you’re going to find yourself facing foreclosure again – and possibly with no way to get another modification – if you miss even one payment.

Related Posts

Stop Foreclosure: How to Ready Your Home for a Fast (Short) Sale

Stop Foreclosure: The Secret Your Lender Won’t Tell You That Can Help Save Your Home

Stop Foreclosure Help: What Happens When You Stop Paying Your Mortgage

Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home

Stopping Foreclosure: Obama Administration to Launch 2 New Programs to Help Homeowners Avoid Foreclosure (One is for Unemployed Homeowners)

“Cash for Keys” Can Help if You Have a House in Foreclosure & Can’t Afford to Move

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.